425

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 5, 2009

TECUMSEH PRODUCTS COMPANY

(Exact name of registrant as specified in its charter)

Michigan	0-452	38-1093240
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

1136 Oak Valley Drive
Ann Arbor, Michigan	48108
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (734) 585-9500

(not applicable)

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

þ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition.

Our press release dated August 5, 2009 regarding our second quarter 2009 consolidated results is furnished as Exhibit 99.1 to this report.

Item 8.01 Other Events.

We hosted our second quarter 2009 earnings conference call and webcast on Thursday, August 6, 2009 at 11:00 a.m. Eastern Time. Via the webcast, we presented our Second Quarter 2009 Investor Presentation, which contained a summary of our financial results for the quarter and year to date and in which we discussed certain proposals to be presented to a vote of shareholders at our 2009 annual meeting, including the previously announced recapitalization proposal and the election of directors. The Second Quarter 2009 Investor Presentation will be posted on our website, www.tecumseh.com, through at least August 6, 2010 and is being filed herewith as Exhibit 99.2 to this Form 8-K in compliance with Rule 425 of the Securities Act of 1933, as amended, and is hereby incorporated into this Item 8.01.

Item 9.01 Financial Statements and Exhibits.

     The following exhibits are filed or furnished with this report:

Exhibit No.	Description
99.1	Press release dated August 5, 2009
99.2	Second Quarter 2009 Investor Presentation

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	TECUMSEH PRODUCTS COMPANY
Date: August 6, 2009	By	/s/ James S. Nicholson
		James S. Nicholson
		Vice President, Treasurer and Chief Financial Officer

NOTE: The information in Item 2.02 and in Exhibit 99.1 shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, except as shall be expressly set forth by specific reference in the filing. The inclusion of any information in Item 2.02 is not an admission as to the materiality of the information.

EXHIBIT INDEX

Exhibit No.	Description
99.1	Press release dated August 5, 2009
99.2	Second Quarter 2009 Investor Presentation

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EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

Contact:
Teresa Hess
Director, Investor Relations
Tecumseh Products Company
734-585-9507

Tecumseh Products Company Reports Second Quarter 2009 Results

§	The Company continues to meet the demands of the challenging economic environment and position itself for the eventual recovery, with ongoing efforts to improve efficiencies, reduce operating costs and match infrastructure with current volumes
§	The severe global economic contraction that began in the fourth quarter of 2008 continued into the first and second quarters of 2009, resulting in similar downward pressures on sales volumes and margins, culminating in a net loss from continuing operations of $23.3 million for the quarter and $47.8 million for the year 2009 to date
§	Total cash and equivalents amounted to $74.8 million, a reduction of $38.3 million when compared to the beginning of the year. Included in the cash reduction was a $13.1 million payment to the purchaser of the Engine and Powertrain business in the first quarter for purchase price adjustments related to final working capital. Otherwise, cash was utilized in the first and second quarter of 2009 to manage the downturn in volume and to address governance related matters.

ANN ARBOR, Mich., August 5, 2009 — Tecumseh Products Company (NASDAQ: TECUA, TECUB), a leading global manufacturer of compressors and related products, today announced results for its second quarter ended June 30, 2009.

“As with most companies, the global business climate remains difficult and as a result, many of our customers are reducing inventory levels, putting downward pressure on our sales,” said Ed Buker, Chairman, President and CEO of Tecumseh Products. “This has most directly impacted our sales of compressors for commercial and aftermarket applications, as well as refrigeration & freezer applications. The first two quarters in the year also saw unpredictable fluctuations in commodity costs and key currency rates, which served to partially offset the impact of the soft global sales environment. In these extremely challenging times, we had the foresight to make the needed changes to our global manufacturing footprint to weather these circumstances, and we continue to take steps to streamline our operations, with the end goal of establishing Tecumseh as a world-class competitor in the global compressor market.”

Consolidated net sales from continuing operations in the second quarter of 2009 decreased to $161.2 million from $273.8 million in 2008. After consideration for the effect of currency translation, which decreased sales in U.S. dollars by $25.3 million, sales declined by $87.3 million or 31.9%. Compressors for commercial and aftermarket applications showed the most substantial decline when compared to the second quarter of 2008, down by $72.9 million or 51.2%. These volume declines were driven by adverse economic conditions which create overall declines in market volumes. As customers reduce inventory balances to better reflect current sales levels, sales volumes were substantially affected. Sales for refrigeration & freezer (“R&F”) applications also recorded a significant decline, with sales reduced by

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$26.8 million or 31.8% year-on-year. Volumes for R&F product were also substantially affected by the global economic contraction, as consumer credit was considerably more constrained than in the second quarter of 2008, and the comparative rate of housing starts declined. The downturn in market volumes for R&F applications was the end result of the twofold effect of these economic conditions; a decreased demand by consumers combined with lower demand from our R&F customers as they brought their own inventories in line with lower volumes. Cooler-than-normal weather also adversely affected R&F sales in the quarter just ended. Sales of compressors for air conditioning and other applications declined by $12.9 million or 27.4%.

Cost of sales was $156.1 million in the three months ended June 30, 2009 compared to $240.3 million in the three months ended June 30, 2008. As a percentage of net sales, cost of sales was 96.8% and 87.8% in the second quarters of 2009 and 2008, respectively. Gross profit (defined as net sales less cost of sales) declined by $28.4 million, from $33.5 million or 12.2% in the second quarter of 2008 to $5.1 million or 3.2% in the second quarter of 2009. The most substantial impact to gross profit in the second quarter of 2009 was volume declines, which had an unfavorable impact of $32.0 million when compared to the same quarter of 2008. Offsetting the volume declines were favorable productivity costs of $5.2 million, selling price and mix improvements of $3.0 million, favorable currency impacts of $1.9 million, and favorable commodity costs of $0.3 million as compared to the same period in 2008. Lower pension and OPEB credits reduced 2009 gross profit by $2.1 million when compared to the second quarter of 2008; in addition, favorable litigation settlement costs were recorded in Europe in 2008 amounting to $2.2 million, while no such benefit was realized in the current year. All other income and expense items reduced 2009 results by an additional $2.5 million.

Selling and administrative (“S&A”) expenses were $33.1 million and $34.3 million in the three months ended June 30, 2009 and 2008, respectively. As a percentage of net sales, S&A expenses were 20.5% in the second quarter of 2009 compared to 12.5% in the second quarter of 2008. The Company recorded expenditures of approximately $5.0 million in the second quarter of 2009 for one-time professional fees, primarily comprised of legal fees for corporate governance issues. This expenditure constituted an increase of $1.1 million in professional fees incurred for one-time projects when compared to the $3.9 million incurred during the same period in 2008. In addition, a favorable change in estimate of $1.9 million that was recorded in 2008 was not repeated in 2009. The effect of foreign currency translation had a favorable effect in 2009 of $2.8 million; all other S&A expenses decreased in the aggregate by $1.4 million.

Buker commented, “We remain focused on controlling costs and improving efficiencies across our operations. As part of this effort, we are sizing our business in line with global demand. Largely as a result of these actions, we continue to believe the Company is positioned to return to solid levels of profitability when demand eventually rebounds.”

Tecumseh recorded expense of $1.1 million in impairments, restructuring charges, and other items in the three months ended June 30, 2009. These expenses were as a result of costs associated with reductions in force at its Brazilian ($0.8 million) and North American ($0.3 million) locations during the quarter. The Company recorded expense of $3.3 million in impairments, restructuring charges, and other items in the three months ended June 30, 2008. These expenses were as a result of severance and restructuring costs from previously announced actions recognized at its North American ($1.6 million), European ($0.9 million), and Brazilian ($0.8 million) locations during the quarter.

Interest expense amounted to $2.1 million in the three months ended June 30, 2009 compared to $6.2 million in the same period of 2008. The substantially lower interest expense in the current quarter was

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primarily attributable to reduced borrowings, including both debt balances and accounts receivable factoring. Interest income and other, net was $0.6 million in the second quarter of 2009 compared to $3.3 million in the second quarter of 2008, primarily reflecting the lower levels of cash and short-term investments held in 2009.

As a result of the factors described above, net loss from continuing operations for the quarter ended June 30, 2009 was $23.3 million ($1.26 per share, basic and diluted) as compared to net loss of $6.6 million ($0.36 per share, basic and diluted) in the same period of 2008.

Consolidated net sales from continuing operations in the first two quarters of 2009 decreased to $309.3 million from $549.0 million in 2008. After consideration for the effect of currency translation, which decreased sales in U.S. dollars by $53.6 million, compressor sales declined by $186.1 million or 33.9%. Sales of compressors used in commercial applications decreased by $125.2 million or 44.5%. For the commercial and aftermarket business, volume declines were driven by softer economic conditions as well as lower shipments to customers as they too reduced inventory balances to better reflect current sales levels. Dollar volume declines in sales of compressors used in R&F applications were $84.8 million or 49.3%. Year-to-date volumes for R&F product were affected by the same factors that impacted the second quarter; specifically, the global economic contraction, constraints to consumer credit, and the lower rate of housing starts as compared to the same period as 2008, as well as adverse weather conditions. Sales of compressors for air conditioning applications and all other applications also declined by $29.6 million or 30.9%.

Cost of sales was $294.9 million in the six months ended June 30, 2009, as compared to $469.9 million in the same period of 2008. As a percentage of net sales, cost of sales was 95.3% and 85.6% in the first six months of 2009 and 2008, respectively. Gross profit (defined as net sales less cost of sales) declined by $64.7 million, from $79.1 million or 14.4% through the second quarter of 2008 to $14.4 million or 4.7% in the comparable period of 2009. Volume declines accounted for the majority of the decrease in gross profit, reducing 2009 results by $61.6 million as compared to the first two quarters of 2008. Commodity costs were unfavorable year-on-year by $4.3 million, and other purchasing costs were also unfavorable by $2.4 million. Current-year margin was also unfavorably impacted by selling price and mix of $0.3 million. In addition, certain items that were favorable to 2008 results did not recur in 2009. These amounts included a gain on the sale of an airplane and our former airport facility of $4.2 million and favorable litigation settlement costs of $2.2 million. Lower pension and OPEB credits of $3.0 million were also recorded in the current year. In contrast, productivity improvements of $15.0 million and favorable currency impacts of $6.3 million improved 2009 results when compared to the same period of 2008. The effect of all other income and expense items was unfavorable to 2009 results by $8.4 million.

S&A expenses were $65.3 million in the first two quarters of 2009 as compared to $65.9 million in the six months ended June 30, 2008. As a percentage of net sales, S&A expenses were 21.1% and 12.0% in 2009 and 2008, respectively. The Company incurred approximately $8.3 million in the first two quarters of 2009 for one-time professional fees, which included consulting services for strategic planning and legal fees for corporate governance issues, representing an increase of $2.2 million when compared to the $6.1 million incurred in 2008. In addition, a favorable change in estimate of $1.9 million that was recorded in the second quarter of 2008 was not repeated in 2009. The effect of foreign currency translation had a favorable effect in 2009 of $6.1 million; all other S&A expenses increased in the aggregate by $1.4 million.

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The Company recorded expense of $7.0 million and $3.8 million in impairments, restructuring charges, and other items in the year-to-date periods ended June 30, 2009 and 2008 respectively. A summary of these charges (gains) is as follows:

	Six Months		Six Months
	Ended		Ended
(Dollars in millions)	June 30, 2009		June 30, 2008
Excise tax expense on proceeds from salaried retirement plan reversion	$	—	$	20.0
Severance, restructuring costs, and special termination benefits		4.4		5.9
Gain on sale of buildings and machinery		—		(0.6	)
Loss on transfer of surplus land		0.3		—
Environment reserve on held-for-sale building		2.3		—
Curtailment and settlement (gains) / losses		—		(21.5	)
Total impairments, restructuring charges, and other items	$	7.0	$	3.8

As a result of the factors described above, losses from continuing operations were $47.8 million in the current year, compared to a profit of $0.2 million in the first two quarters of the prior year.

As of June 30, 2009, the Company reported total cash and cash equivalents of $74.8 million. Cash used by operations amounted to $24.1 million in 2009, as compared to cash provided by operations of $79.7 million in 2008. In the first quarter of 2009 operations used $15.2 million, while the second quarter used $8.9 million. The 2009 results incorporated a net loss of $48.8 million, which included the non-cash impact of $19.8 million in depreciation expense. In 2008, the $80 million in net proceeds realized from the reversion of the Company’s salaried retirement plan was a significant element of the increase in cash, as was net income (including income from discontinued operations) of $26.0 million.

With respect to working capital, inventories decreased by $19.2 million during 2009, reflecting the lower balances required in 2009 to address current manufacturing requirements as well as global efforts to reduce inventories. Accounts receivable also declined by $15.7 million from the beginning of the year. The Company also recorded decreases to accounts payable and other accrued expenses and liabilities (down $24.9 million since the end of 2008), which was primarily attributable to the current dip in sales volumes, which led to reduced purchases of raw materials.

Cash used by investing activities was $17.8 million in the first six months of 2009, versus cash provided by investing activities of $12.3 million for the same period of 2008. 2009 expenditures of $13.1 million were related to a working capital settlement made to the purchaser of our former Engine & Powertrain business (which is included in our cash flow statement in the sale of assets line). $22.6 million in proceeds were received from the sale of assets during 2008, including $14.2 million received from the sale of MP Pumps, while no such proceeds were recorded in 2009. Changes in restricted cash balances represented a source of $0.6 million in cash in 2009 and a use of $7.6 million in cash in 2008.

Cash provided by financing activities was $2.3 million in the first two quarters of 2009 as compared to cash provided by financing activities of $0.9 million in the comparable period of 2008. The changes in both periods were due to increases in borrowing at foreign facilities.

4

Tecumseh reported that the condition of the global economy as discussed above as well as dramatic fluctuations in commodity costs and key currency rates had a significant impact on its business operations in the first two quarters of 2009. The outlook for the remainder of 2009 is subject to these same variables.

The Company continues to be concerned about maintaining its expected level of sales volumes, particularly in light of current global economic conditions. The negative volume trends in the first and second quarters of 2009 were severe. While seasonal activity and some recent increases in order activity suggest that second half volumes will improve over the first half of the year, we cannot currently project when market conditions may begin to improve on a sustained or significant basis.

Certain key commodities, including copper, saw significant fluctuations in pricing during 2008 and the first two quarters of 2009; copper prices increased by more than 22% through July and then dropped almost 63% in August through December, before rising again by more than 65% in the first and second quarters of 2009. As of June 30, 2009, the Company held approximately 88% of its total projected copper requirements for the remainder of 2009 in the form of forward purchase contracts and futures, which will provide it with substantial (though not total) protection from further resurgence in price during the remainder of the year, but also will detract from its ability to benefit from any price decreases. We expect the total 2009 cost of purchased materials for the full year, including the impact of hedging activities, to be flat or slightly lower than the prior year, depending on commodity cost levels (particularly steel costs) over the course of the year. As a partial means of addressing the escalating costs of commodities in 2008, the Company implemented price increases; over the course of 2009 it expects to closely monitor pricing levels to correspond appropriately with changes, either favorable or unfavorable, in its cost structure.

“When compared to 2008 we continue to benefit from favorable currency rates, which were largely locked in through our hedging activities. Although recent currency trends have turned unfavorable, our continued hedging activity will mitigate these trends through the remainder of the year. We are also seeing the benefits of our productivity improvement efforts, and commodity costs were favorable in the second quarter when compared to the same period in 2008, as opposed to unfavorable in the first. While these improvements pale in comparison to the effects of declines in volume they will prove to be the foundation of much better results when industry volumes recover,” noted James Nicholson, Chief Financial Officer of Tecumseh Products.

The Brazilian real, euro and Indian rupee continue to show significant volatility against the U.S. dollar. The Company has considerable forward purchase contracts to cover its exposure to fluctuations in value during 2009. In the aggregate, the changes in foreign currency exchange rates, after giving consideration to open contracts and including the impact of balance sheet re-measurement, are expected to have a favorable financial impact totaling approximately $18 to $25 million when compared to 2008 at current projected exchange rates.

As part of its efforts to offset unfavorable market conditions, improve profitability and reduce the consumption of capital resources, the Company’s plans for 2009 include continued cost reduction activities including, but not limited to, further employee headcount reductions, consolidation of productive capacity and rationalization of product platforms, and revised sourcing plans. During 2008, the Company reduced its headcount by approximately 2,400 people; further headcount reductions of approximately 675 people since January 1, 2009 reflect the Company’s ongoing efforts to scale the business to current levels of volume. We are also evaluating further restructuring actions over the remainder of 2009.

5

The amount of capital expenditures incurred during 2009 will ultimately depend on the timing and extent of economic recovery. The Company anticipates that 2009 capital expenditures will be in the range of $15 to $18 million — below its current target average of $20 to $25 million per year — as the Company carefully manages and prioritizes expenditures based on the potential to achieve rapid return on the capital invested.

Buker concluded: “In the current environment of global economic weakness, we remain diligent and disciplined in our use of cash. Although we used cash to fund our operations in the second quarter, at nearly $75 million, our cash position continues to be a solid foundation to ensure our continued progress toward achieving our ultimate goal of transforming Tecumseh into a world-class competitor in our core compressor business and returning value to shareholders. We’ll also see infusions of cash in the second half of 2009 through the receipt of an income tax refund and the anticipated reversion of our hourly pension plan. Although the significant progress we have made to date was masked by deteriorating market conditions in the second quarter, we remain confident that we are on the right path to ensure a solid future for our Company.”

Conference Call to Discuss Second Quarter 2009 Results

Tecumseh Products Company will host a conference call to report on the Company’s second quarter 2009 results on Thursday, August 6, 2009 at 11:00 a.m. ET. The call will be broadcast live over the Internet and then be made available for replay through the Investor Relations section of Tecumseh Products Company’s website at www.tecumseh.com.

Press releases and other investor information can be accessed via the Investor Relations section of Tecumseh Products Company’s web site at http://www.tecumseh.com.

Cautionary Statements Relating to Forward-Looking Statements

This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to the safe harbor provisions created by that Act. In addition, forward-looking statements may be made orally in the future by or on behalf of the Company. Forward-looking statements can be identified by the use of terms such as “expects,” “should,” “may,” “believes,” “anticipates,” “will,” and other future tense and forward-looking terminology.

Readers are cautioned that actual results may differ materially from those projected as a result of certain risks and uncertainties, including, but not limited to, i) unfavorable changes in macro-economic conditions and the condition of credit markets, which may magnify other risk factors; ii) the success of our ongoing effort to bring costs in line with projected production levels and product mix; iii) financial market changes, including fluctuations in foreign currency exchange rates and interest rates; iv) availability and cost of materials, particularly commodities, including steel and copper, whose cost can be subject to significant variation; v) actions of competitors; vi) our ability to maintain adequate liquidity in total and within each foreign operation; vii) the effect of terrorist activity and armed conflict; viii) economic trend factors such as housing starts; ix) the ultimate cost of resolving environmental and legal matters, including any liabilities resulting from the regulatory antitrust investigations commenced by the United States Department of Justice Antitrust Division, the Secretariat of Economic Law of the Ministry of Justice of Brazil or the European Commission, any of which could preclude commercialization of products or adversely affect profitability and/or civil litigation related to such investigations; x) emerging governmental regulations; xi) the ultimate cost of resolving environmental and legal matters; xii) our ability to profitably develop, manufacture and sell both new and existing

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products; xiii) the extent of any business disruption that may result from the restructuring and realignment of our manufacturing operations or system implementations, the ultimate cost of those initiatives and the amount of savings actually realized; xiv) the extent of any business disruption caused by work stoppages initiated by organized labor unions; xv) potential political and economic adversities that could adversely affect anticipated sales and production in Brazil; xvi) potential political and economic adversities that could adversely affect anticipated sales and production in India, including potential military conflict with neighboring countries; xvii) increased or unexpected warranty claims; and xviii) the ongoing financial health of major customers. These forward-looking statements are made only as of the date of this release, and the Company undertakes no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.

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CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)*

	Three Months Ended						Six Months Ended
	June 30,						June 30,
(Dollars in millions, except per share data)	2009			2008			2009			2008
Net sales	$	161.2		$	273.8		$	309.3		$	549.0
Cost of sales		156.1			240.3			294.9			469.9
Selling and administrative expenses		33.1			34.3			65.3			65.9
Impairments, restructuring charges, and other items		1.1			3.3			7.0			3.8
Operating (loss) income		(29.1	)		(4.1	)		(57.9	)		9.4
Interest expense		2.1			6.2			5.0			13.5
Interest income and other, net		0.6			3.3			1.4			5.1
(Loss) income from continuing operations before taxes		(30.6	)		(7.0	)		(61.5	)		1.0
Tax (benefit) expense		(7.3	)		(0.4	)		(13.7	)		0.8
(Loss) income from continuing operations		(23.3	)		(6.6	)		(47.8	)		0.2
Income (loss) from discontinued operations, net of tax		(1.6	)		15.6			(1.0	)		25.8
Net (loss) income		($24.9	)	$	9.0			($48.8	)	$	26.0
Basic (loss) earnings per share:*
(Loss) income from continuing operations		(1.26	)		(0.36	)		(2.59	)		0.01
(Loss) income from discontinued operations, net of tax		(0.09	)		0.85			(0.05	)		1.40
Net (loss) income per share, basic		($1.35	)	$	0.49			($2.64	)	$	1.41
Diluted (loss) earnings per share:**
(Loss) income from continuing operations		(1.26	)		(0.36	)		(2.59	)		0.01
(Loss) income from discontinued operations, net of tax		(0.09	)		0.85			(0.05	)		1.30
Net (loss) income per share, diluted		($1.35	)	$	0.49			($2.64	)	$	1.31
Weighted average shares, basic (in thousands)		18,480			18,480			18,480			18,480
Weighted average shares, diluted (in thousands)		19,871			19,871			19,871			19,871
Cash dividends declared per share	$	0.00		$	0.00		$	0.00		$	0.00

*

The consolidated condensed financial statements of Tecumseh Products Company and Subsidiaries (the “Company”) are unaudited and reflect all adjustments (including normal recurring adjustments) which are, in the opinion of management, necessary for a fair statement of the financial position and operating results for the interim periods. The Dec. 31, 2008 consolidated condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by generally accepted accounting principles in the United States (“U.S. GAAP”). The consolidated condensed financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s Annual Report for the fiscal year ended Dec. 31, 2008. Due to the seasonal nature of certain product lines, the results of operations for the interim period are not necessarily indicative of the results for the entire fiscal year.

**

In 2007, we issued a warrant to a lender to purchase 1,390,944 shares of our Class A Common Stock, which is equivalent to 7% of our fully diluted common stock (including both Class A and Class B shares). Diluted earnings per share for the six months ended June 30, 2008 are therefore calculated based on a total of 19,870,628 shares. For the three and six months ended June 30, 2009 and the three months ended June 30, 2008 however, this warrant is not included in diluted per share information, as the effect would be antidilutive due to the losses recorded in continuing operations.

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CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED)

	June 30,		December 31,
(Dollars in millions)	2009		2008
Assets
Current assets:
Cash and cash equivalents	$	74.8	$	113.1
Restricted cash and cash equivalents		11.9		12.5
Accounts receivable, net		78.1		88.1
Inventories		113.4		123.0
Assets held for sale		16.3		21.7
Other current assets		59.9		54.2
Total current assets		354.4		412.6
Property, plant and equipment — net		254.1		244.3
Prepaid pension expense		82.0		81.0
Other assets		73.7		60.6
Total assets	$	764.2	$	798.5
Liabilities and Stockholders’ Equity Current liabilities:
Accounts payable, trade	$	97.9	$	109.6
Short-term borrowings		37.3		30.4
Liabilities held for sale		1.3		1.0
Accrued liabilities		63.8		98.2
Total current liabilities		200.3		239.2
Long-term debt		0.3		0.4
Deferred income taxes		4.7		8.7
Pension and postretirement benefits		57.8		58.2
Product warranty and self-insured risks		5.8		8.0
Other non-current liabilities		7.0		6.6
Total liabilities		275.9		321.1
Stockholders’ equity		488.3		477.4
Total liabilities and stockholders’ equity	$	764.2	$	798.5

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CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)

	Six Months Ended
	June 30,
(Dollars in millions)	2009			2008
Cash flows from operating activities:
Cash (used in) provided by operating activities		($24.1	)	$	79.7
Cash flows from investing activities:
(Payments made) proceeds from sale of assets		(13.1	)		22.6
Capital expenditures		(5.2	)		(2.7	)
Long term investments		(0.1	)		—
Change in restricted cash and cash equivalents		0.6			(7.6	)
Cash (used in) provided by investing activities		(17.8	)		12.3
Cash flows from financing activities:
Debt issuance / amendment costs		—			(1.6	)
Borrowings, net		2.3			2.5
Cash provided by financing activities		2.3			0.9
Effect of exchange rate changes on cash		1.3			9.0
(Decrease) increase in cash and cash equivalents		(38.3	)		101.8
Cash and cash equivalents:
Beginning of period		113.1			76.8
End of period	$	74.8		$	178.6

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EX-99.2

Exhibit 99.2

Tecumseh Products Company
Second Quarter 2009 Earnings Conference Call
Thursday, August 6, 2009 — 11:00 a.m. ET

Approximate Timing
30 minutes of presentation
30 minutes of Q&A

Call Outline

1. Operator:	Call Opening
2. Teresa Hess:	Safe Harbor Statement
3. Ed Buker:	Second Quarter 2009 Operational Overview
4. Jim Nicholson:	Second Quarter 2009 Financial Overview
5. Ed Buker:	Progress and Introduction of Seshu Seshasai
6. Seshu Seshasai:	Engineering and Product Development Initiatives
7. Ed Buker:	2nd Half 2009 View, Summary & Conclusion
Turn call over to Operator for Q&A
8. Operator:	Question and Answer Introduction
9. Management:	Question and Answer Session
10. Ed Buker:	Final Remarks

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Section 1— OPERATOR: CALL OPENING

Section 1.1	Good morning and welcome to Tecumseh Products’ second quarter 2009 conference call.
Section 1.2	All participants will be in a listen-only mode until the question-and-answer portion of the call. This conference call is being recorded at the request of Tecumseh Products. If anyone has any objections, you may disconnect at this time.
Section 1.3	I would now like to introduce Ms. Teresa Hess, Director of Financial Reporting and Investor Relations at Tecumseh Products. Ms. Hess, you may proceed.

Section 2 — TERESA HESS: INTRODUCTIONS AND SAFE HARBOR STATEMENT

Section 2.1	Good morning and welcome to Tecumseh Products’ second quarter 2009 conference call.
Section 2.2	I am joined on the call today by:

§	Ed Buker, President and CEO
§	Jim Nicholson, Vice President, Treasurer and Chief Financial Officer

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§	Dr. Seshu Seshasai, Vice President, Global Engineering and
§	Lynn Dennison, Vice President, Law & Risk Management, Secretary & General Counsel

Section 2.3	Yesterday afternoon we announced the Company’s second quarter results for the period ended June 30, 2009.
Section 2.4	Please note that the release is available on many news sites and it can be viewed on our corporate web site at www.tecumseh.com
Section 2.5	Also, this call is being simultaneously broadcast on the Internet and will be archived for replay starting this afternoon. The replay also can be accessed at our web site.
Section 2.6	Before I turn the call over to Ed to comment on our results, I would like to remind you that this conference call contains certain statements regarding the Company’s plans and expectations which are forward-looking statements and are made pursuant to the Safe Harbor provision of the Securities Litigation Reform Act of 1995.

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Section 2.7	These forward-looking statements reflect the Company’s views at the time such statements are made with respect to the Company’s future plans, objectives, events and financial results such as revenues, expenses, income, earnings per share, operating margins, financial position, expected results of operation and other financial items, as well as industry trends and observations.
Section 2.8	In addition, words such as estimate, expect, intend, should, could, will and variations of such words and similar expressions are intended to identify forward-looking statements.
Section 2.9	These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict with regard to timing, extent, likelihood and degree of occurrence. There are a number of factors, many of which are beyond the Company’s control, which could cause actual results and outcomes to differ materially from those described in the forward-looking statements.

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Section 2.10	Risk factors exist and new risk factors emerge from time to time that may cause actual results to differ materially from those contained in the forward-looking statements.
Section 2.11	Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results. Furthermore, the Company expressly disclaims any obligation to update, amend or clarify forward-looking statements. In addition to the foregoing, several risk factors are discussed in the Company’s most recently filed Annual Report on Form 10-K and other SEC filings, under the titles “Risk Factors” or “Cautionary Statements Related to Forward-Looking Statements,” and those discussions regarding risk factors as well as the discussion of forward-looking statements in such sections are incorporated by reference in this call.
Section 2.12	With that said, I would now like to turn the call over to Ed Buker, President and CEO of Tecumseh Products.

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Section 3 — ED BUKER: SECOND QUARTER 2009 OPERATIONAL OVERVIEW
Section 3.1	Thank you, Teresa. Good morning and welcome to our second quarter 2009 conference call.
Section 3.2	Today we have some good things to cover, some not so good things to cover and some non-routine things to cover. You might say I will be doing my Clint Eastwood imitation in that we will be talking about the Good, the Bad and the Ugly.
Section 3.3	We’ll start by getting the Bad out of the way, which of course, in this context are the results of the second quarter. I have a few high level comments to establish some context for our second quarter results, including the impact of the broader markets and global economic conditions on those results, then I will have our Vice President, Treasurer and Chief Financial Officer, Jim Nicholson cover those financial results in some greater detail. After getting the Bad out of the way we will turn to the Good. I would like to share with you the progress we are making to improve results and to position Tecumseh Products for success into the future. Part of the story here is the progress we are making with respect to our product plans.

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Accordingly, as part of my continued efforts to introduce you to more members of our management team, I will then turn the call over to Seshu Seshasai, our Vice President of Global Engineering, to share with you additional details regarding our engineering and product development initiatives going forward. Also, I believe you will be particularly interested in hearing about our view of results for the remainder of the year and I am prepared to share those with you, again under the banner of the Good. Last, with our Shareholder meeting and proxy contest just 8 days off, I will address the non-routine portion of our call. Finally, we will open the call up to your questions.

Section 3.4

Overall, the second quarter was a mirror image of our first quarter, with the primary issue impacting our performance being the significant drop in volume that we experienced. Make no mistake, we are not happy with these results, regardless of the reasons, and we are committed to improving them. Last quarter we talked about some potential signs of economic improvement in the second quarter, but they just did not materialize. After removing the effect of currency translation, our first quarter sales ran approximately 36% below the prior year and the second quarter was 32% below

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	the prior year. It simply feels like that starting in November of 2008 industry volumes just instantaneously shrank by approximately 30 to 35% and stayed there for the next 7 to 8 months without improvement.
Section 3.5	This decline is of an order of magnitude that we simply could not overcome the loss of revenue with cost cutting alone, which we have been actively pursuing. As we deal with the ongoing global economic weakness and associated downward pressure on our revenues, we continue to work aggressively to control costs and improve efficiencies across our operations, including sizing our business in line with global demand. After reducing our headcount by approximately 2,400 in 2008, we have made additional reductions of 675 positions in the first six months of 2009, while minimizing the costs associated with those reductions. Specifically, in the second quarter we had headcount reductions in Brazil and North America.
Section 3.6	In terms of selling and administrative costs, excluding unusual items and currency effects we were able to reduce costs by $1.4 million in the second quarter. Overall, despite

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	all our efforts, we reported a net loss from continuing operations of $23.3 million, or $1.26 per share.
Section 3.7	Now to comment further on our second-quarter financial results, I’ll turn the call over to Jim.
Section 4 — JIM NICHOLSON: SECOND QUARTER 2009 FINANCIAL OVERVIEW
Section 4.1	Thanks, Ed.
Section 4.2	As Ed explained, the continued global economic slowdown had a significant detrimental impact on our financial results for the quarter. Despite our efforts to control costs and balance output with current demand, our volumes continued at a level that could not support even our reduced infrastructure.
Section 4.3	On the bottom line, we reported a net loss of $24.9 million, or $1.35 per share, for the second quarter of 2009, versus net income of $9.0 million, or $0.49 per share, in the year-ago quarter. However, prior year results were favorably impacted by discontinued operations. Looking at results from continuing operations might be more indicative of underlying

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performance. Loss from continuing operations for the current quarter was $23.3 million, or $1.26 per fully diluted share, compared to a loss from continuing operations of $6.6 million, or $0.36 per fully diluted share, in the second quarter a year ago.

Section 4.4

Our operating loss was $29.1 million for the second quarter, compared with an operating loss of $4.1 million in the prior-year quarter. Operating results included impairments, restructuring and other charges of $1.1 million, versus $3.3 million in the second quarter of 2008. These charges in the second quarter comprised $0.8 million in costs associated with reductions in force at our Brazilian operations and $0.3 million in similar costs at our North American operations, reflecting the Company’s continuing restructuring efforts as well as our actions to size our operations to current volume levels. Excluding impairments, restructuring and other charges, the operating loss amounted to $28.0 million. The decline was simply caused by the much lower unit volumes and associated unfavorable overhead absorption, and was partially offset by improvements in productivity, sales price and mix, favorable currency impacts and improved commodity costs.

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.
Section 4.5	Consolidated net sales for the quarter fell $112.6 million, to $161.2 million from $273.8 million in the second quarter of 2008. Excluding the impact of currency translation, consolidated net sales declined by $87.3 million, or 31.9%, in the quarter.
Section 4.6	Our press release breaks down the total $112.6 million year-over-year decline in net sales in the second quarter by application, however, it is safe to say sales were down across all applications.
Section 4.7	Most of our change in operating profit can be attributable to gross profit which declined by $28.4 million to $5.1 million, from $33.5 million in the second quarter of 2008. As I just mentioned volume was the culprit, which led to lower absorption of fixed costs. The aggregate impact on gross margin from volume declines during the quarter amounted to $32.0 million. Partial offsets included favorable productivity and other cost improvements of $5.2 million, selling price and mix improvements of $3.0 million, favorable currency impacts of $1.9 million, and favorable commodity costs of $0.3 million. Commodity savings are lower than one might expect for two reasons. First our steel costs, as negotiated

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with our suppliers did not come down as rapidly as the overall market and second, our hedge coverage on copper resulted in our continuing to take delivery at elevated prices versus predominant market prices over the quarter. Lastly, there were also a number of favorable one-off items that did not recur from 2008.

Section 4.8

Selling and administrative or S&A expenses decreased $1.2 million, to $33.1 million in the second quarter of 2009, but as a percentage of sales, S&A increased to 20.5% from 12.5%, given the much lower revenue levels in the period. We spent $5.0 million in the second quarter for one-time professional fees incurred outside the normal course of business, primarily for legal fees, for our response to an anti-trust investigation of the compressor industry and other corporate governance matters. These expenditures marked a $1.1 million increase in such fees compared with the second quarter of 2008. Also, a favorable reserve adjustment of $1.9 million was included in the second quarter of 2008, which was not repeated in the quarter just ended. The effect of foreign currency translation had a favorable effect in 2009 of $2.8 million; therefore all other S&A costs were reduced by $1.4 million when compared to the prior year.

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Section 4.9

Turning to cash flow, cash used in operations during the first six months of 2009 amounted to $24.1 million, compared with cash provided by operations of $79.7 million in the comparable period in 2008. Year-to-date 2009 operating cash flow is essentially driven by our net loss of $48.8 million exclusive of depreciation of $19.8 million for a net cash use of $29 million, and then further reduced by improvements in net working capital items, including a decrease in inventory of $19.2 million or 7.8% compared to the beginning of the year. The decrease reflects the lower balances required to address current manufacturing requirements as well as our continued global efforts to turn inventories more quickly. Other than the change in operating results, the major change in comparison to the first six months of 2008, was the $80.0 million in net proceeds realized from the reversion of the Company’s salaried retirement plan.

Section 4.10

Given the increased cash needs of our core business during this challenging time, total cash and cash equivalents declined by $38.3 million from the beginning of the year to $74.8 million at June 30, 2009. Excluding a $13.1 million payment for a purchase price adjustment made in the first quarter of 2009, cash balances declined by $12 million and $13.2

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	million in the first and second quarters of 2009, respectively. About one-third of these declines can be attributed to our spending for our antitrust and governance issues.
Section 4.11	Interest expense decreased by approximately $4.1 million, to $2.1 million, compared with $6.2 million in the second quarter of 2008. A majority of the improvement in interest expense is attributable to reduced levels of borrowings, including lower debt balances and accounts receivable factoring.
Section 4.12	Now I will turn the call back to Ed.
Section 5 — ED BUKER: PROGRESS AND INTRODUCTION OF SESHU SESHASAI
Section 5.1	Thanks Jim. Now let’s turn our attention to more upbeat news.
Section 5.2	We believe that to return to solid levels of profitability, we must continue the progress we are making towards permanent and sustained cost reductions, improved customer service and delivery and the offering of world class products. When we

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	execute on all of these parameters we will not only increase revenues organically but also be poised to capture revenues when economic activity increases as well. This in turn will result in what our shareholders are looking for: increased profits and share value growth.
Section 5.3	I have repeatedly expressed to you that, when I joined the company, Tecumseh still had the key ingredients to deliver on our promise. This includes a widely respected brand, great customers, excellent distribution networks and good people. But what it lacked to bring these elements together were modern business processes, a cohesive strategy and leadership to bring the elements together.
Section 5.4	Step one was to bring the necessary leadership talent on board to address the multitude of markets we serve and spectrum of products and services we provide. In particular, we sought individuals with experience in building and/or repairing the core business processes in their respective functions that address these areas of our business. In our last call, I introduced you to Pat Canavan, our VP of Sales, who described improvements we were making in our sales and marketing efforts.

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Section 5.5 This quarter we are going to take the opportunity to introduce you to Seshu Seshasai, our Vice President of Global Engineering. Seshu comes to us with a very impressive background in engineering turnarounds. Over the last three decades of his career, he has had the opportunity to lead a variety of engineering and product development groups, from his time in engineering with Nacco Materials Handling Group, to his engineering and product development leadership roles at industry leaders such as the Stanley Works, Textron and Newell Rubbermaid in the decade before he joined Tecumseh. All of these companies are multi-billion-dollar global operations incorporating many distinct product lines. He has hands on experience with all the design methodologies and tools used in compressor designs, which is really no different from other types of mechanical products. Over the course of his career, he has become a respected resource among peers with respect to a variety of design methodologies and tools used by engineers and product designers at leading global companies. In every case, the most important initiatives and accomplishments were the result of the initiatives of the teams he has assembled and led

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	— not the unique knowledge contributed by any single individual.
Section 5.6	With that introduction I turn the call over to Seshu.
Section 6 - SESHU SESHASAI: DETAILED INITIATIVES ON ENGINEERING AND PRODUCT DEVELOPMENT
Section 6.1	Thank you, Ed. I’m pleased to be able to join our investors on this call today. As Ed indicated in his remarks, we are taking a number of actions to transform Tecumseh into a world-class competitor in our core compressor business. Certainly at the center of being world-class is the ability to lead in product innovation, which I believe is captured in the Engineering Group mission statement that we developed when I joined the Company in 2008. Our mission is to “Build an organization that continually delivers innovative products ever faster and at lower cost that will raise customer expectations and industry standards.” To achieve this mission I would like to share a snapshot of some of the important initiatives we’ve undertaken over the last year to transform Tecumseh’s Engineering and Product Development.

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Section 6.2 When I came to Tecumseh in 2008, I inherited an engineering and product development team that was disorganized and focused on areas that did not maximize the overall efficiency and productivity of the group. The group was composed of regional silos with significant overlap of activity that created redundant activity and increased costs. Resources were not allocated based on an overall engineering plan, but rather based on the shifting priorities of a single person. As a result, many projects were started but not fully resourced to completion and the group lacked an overall focus. In 2006, the group was working on more than 200 different projects, with very few completed and very little revenue realized from the projects that reached completion. In addition, some major projects were fully capitalized with new facilities and tooling, yet they failed because they were not validated with actual customers and revenue could not be generated to support them. For example, the Company’s first attempt at designing and building scroll compressors spanned 15 years and resulted in investments in buildings and equipment in excess of $50 million in the buildings alone, yet the product didn’t work and the manufacturing method failed. Companywide, we had over 25,000 bills of material for every product, all of which needed to be stored, maintained and updated regularly.

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	Unfortunately, of the 25,000 only 7,000 were products that had generated any sales within the last 3 years.
Section 6.3	Ultimately, there was no connection between engineering product development priorities, and the marketability and revenue potential of each project. Resources were devoted to projects based on the priorities of senior management and depended on who was promoting the project at the moment. R&D efforts were more political and bureaucratic than driven by market research and customer demand.
Section 6.4	To get to the heart of the challenges involved in transforming this group, I measured performance when I arrived, and those measurements illustrate the situation we faced. I visited all locations and analyzed the work breakdown of all of our team members globally across more than 80 different activities. We measured how our Engineering team allocated its time and compared those results to industry benchmarks. I found that our group was spending excessive time in testing, certification and administrative activities, and insufficient time in new product design and training.
Section 6.5	Perhaps most disturbing and telling, the team was spending only 15% of their time supporting the sales and marketing,

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manufacturing and sourcing teams, when world-class manufacturers are devoting 20-25% of engineering time to coordinating with operations and supporting customers. How could our group expect to design new products that customers demand, that can be efficiently manufactured and sourced at a better cost, if we were not adequately involving these groups in the design process?

Section 6.6

Once we assessed where we stood, we began making the transformation into a world-class engineering and product development team. The first step in the process was developing the mission and vision of the group, and making sure that every member of our team was committed to achieving them. Next, we had to shift the focus to top line growth, bottom line improvement and quality. The most critical aspect of the new focus was measurability of results, which meant budgets, sales targets and profitability measures that could be incorporated at every stage of new product development. We introduced the award winning phase gate process, which is well proven in the multibillion dollar companies where I previously worked and implemented it. Globally, we rolled out a common phase gate process applicable to all types of projects.

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Section 6.7

We established a clear focus and strategy on new product programs that demanded they be market driven. Globally, all projects were available on one document, Projects Ranking List (PRL), documenting critical data and ranked by a profits-to-investment ratio. Budget projects from this list are now incorporated into the sales plan for the year. All projects are reviewed for global opportunity — including the prospect for bigger sales with the least development effort and investment. We also altered our focus on scrolls; establishing a clear strategy. We laid out a timeline for more than 60 models, with over 20 of these released to date. We initiated university alliances globally and launched research on two additional mechanism technologies, several refrigerants and on motors, as well.

Section 6.8

We’ve made significant progress in transforming the way each team member works, now that all project teams are global. No matter where a team member is located, we are all focused on products and initiatives that meet customer demand and can generate revenues in every global market. We are all operating from the same set of goals using the same methods to measure our priorities and success.

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Section 6.9

As a result of our efforts, we have reduced the total number of projects from more than 200 to the 50 projects with the most potential in terms of revenue generation and profitability. Of the 25,000 bills of material I mentioned earlier, we have successfully pruned 5,000 of the 18,000 which hadn’t generated sales over the previous three years. We’ve made significant progress in transforming our team in the last year and a half, but we still have a lot more to accomplish. Fortunately, our entire team of manufacturing and compressor experts is convinced we are taking the right actions and are on the right path to making Tecumseh into an industry leader once again.

Section 6.10

Ed — Back to you.

Section 7 ED BUKER — SECOND HALF VIEW, LEGAL AND GOVERNANCE DISCUSSION AND SUMMARY

Section 7.1	Thanks Seshu.
Section 7.2	That covers another element of the fundamental changes we are making for improvement over the long haul. Now let me

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	cover our view of the remainder of the year. For those of you keeping score, I’m still in the Good portion of our discussion.
Section 7.3	Despite our results for the quarter and the first half of the year, we remain convinced that we are taking the right actions and pursuing the right strategic objectives to transform Tecumseh into the world-class competitor each of us envisions and that we will start to see more positive results.
Section 7.4	Looking ahead, the first and most obvious factor to discuss is volume. Volume began to improve in comparison to the prior year in June; and July improved further. While year to date to June we were down about 34% compared to prior year, June was down 24% and July only down 15%. Our current view for August and September also reflects better annual run rates than the first half of the year. By no means am I declaring the recession over. In fact, we haven’t yet been able to conclude that these months make a trend, in fact, it may be an anomaly. However, over the last quarter our actual sales have begun to more accurately track our forecasts as provided by our customers and our customers are implying better volumes in the latter half of the year.

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Section 7.5	Based upon these expected volumes and our cost reduction efforts we expect to run at breakeven operating profit before depreciation, restructuring charges, anti-trust and governance items over the remainder of the year. This further preserves our cash position while we continue to execute our best cost country plans. In fact, June 30 should be our low point for the year for cash as improved second half results and the natural cash conversion cycle will produce positive cash flow in the second half of the year.
Section 7.6	Included in this projection is the expectation that full-year 2009 costs for purchased materials will be flat to slightly lower than 2008, depending on commodity price movements, especially steel, over the course of the remainder of the year. In addition, we expect favorable impact of currencies to amount to about $6 to $12 million over the remainder of the year, although recent volatility could reduce this amount.
Section 7.7	We’ve spoken with many of you recently about our strategic plans in detail. However, if you haven’t seen those presentations, I would refer you to the 2009 Annual Meeting

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	section contained in the Investor Relations portion of our website, www.tecumseh.com.
Section 7.8	Last, I would point out that our restructuring continues. We recently made public our discussions with the Works Council in France regarding our plans to reduce the work force there by 10% or approximately 150 people through a voluntary retirement program. Should we be able to carry through with this plan, we would expect to incur approximately $10 — 12 million in severance and social costs.
Section 7.9	Now I would like to turn our attention to the non-routine portion of the call, including important challenges we are facing on the legal and corporate governance fronts.
Section 7.10	As we announced in mid-February, Tecumseh is one of several companies involved in investigations into possible anti-competitive practices in the compressor industry being conducted by antitrust authorities around the globe, and we are cooperating with the United States, Brazil, the European Union and several other jurisdictions. This investigation is

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	still ongoing, and we continue to provide the cooperation necessary to secure conditional leniency agreements which, as we have previously disclosed, would exempt us from significant fines and penalties that can result from such matters. Although the outcome of these investigations cannot be known, we will continue to update investors on developments as conditions warrant, so long as any such updates do not interfere with the ongoing investigations.
Section 7.11	Since we last spoke authorities in Brazil have initiated formal enforcement proceedings against the industry participants and certain individuals, including, among others, Gerson Verissimo, the former president of our Brazilian subsidiary. Again, our conditional leniency agreement stands to protect Tecumseh from government fines and penalties in this jurisdiction, subject to our ongoing cooperation. Non-cooperating individuals, such as Gerson Verissimo, are subject to fines as well as criminal prosecution.
Section 7.12	As many of you are no doubt aware, we also face challenges related to the current proxy contest initiated by the Herricks.

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Section 7.13

In a little more than a week, at our 2009 Annual Meeting, our shareholders face a critical choice between moving forward with Tecumseh’s recovery or changing back to the failed leadership and business model that destroyed value and brought the Company to the brink of bankruptcy. It’s been nearly two years since I took the helm of the Company. During that time, I’ve had the opportunity to speak with many fellow shareholders about our strategic plan for restoring Tecumseh’s brand and about the issues involved in the proxy challenge brought by the Herricks. From these conversations, I know you are familiar with the positions the Company and the Herricks have articulated. You’ve read our contrasting approaches on key topics such as cash management, corporate governance, independent Board leadership and basic management philosophy. The differences between our two visions are clear.

Section 7.14

As we have already disclosed publicly, in the first quarter, the Board of Directors approved a recapitalization proposal and directed that it be submitted to the Company’s shareholders for consideration at our upcoming 2009 Annual Meeting, determining that the recapitalization is fair to, and in the best interests of, the Company and all of its shareholders. As part of the recapitalization, each share of Class A common stock

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	would be exchanged for a share of new voting common stock, and each share of Class B Common Stock would be exchanged at a 10% premium for 1.1 shares of new voting common stock. The recapitalization will be subject to the approval of a majority of the outstanding Class A shares and Class B shares, each voting separately as a class.
Section 7.15	As detailed in our proxy statement/prospectus, the Board believes that the recapitalization, if our shareholders approve it, will result in a more modern capital structure and more attractive stock for a broader number of investors and have substantial benefits to the Company’s investors. These benefits are discussed in detail in materials we have filed.
Section 7.16	In addition to the recapitalization proposal, the Board of Directors is recommending that shareholders elect at the 2009 Annual Meeting a slate of director candidates that was recommended by the independent Governance and Nominating Committee of the Board after an intensive search process. The slate of candidates includes four new nominees who possess impressive experience and backgrounds that we believe will prove valuable to the Company as we execute on our global strategic plan in this very difficult economy.

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Section 7.17

I have heard firsthand from many shareholders that they want to stop the seemingly endless cycle of attacks instigated by the Herricks. Like me, they believe this pattern will ultimately destroy Tecumseh. So perhaps the most important question for shareholders as we approach the Annual Meeting is this: What will allow us to move beyond this destructive cycle — and enable us to exclusively focus on our efforts to unlock the value of the enterprise for all shareholders?

Section 7.18

I believe the answer is clear. Taken together, our two proposals — the election of a highly qualified, independent Board and the implementation of a modern, single-class share structure that aligns voting power with economic interest — present the best opportunity to move beyond the Herricks’ costly disputes that are weighing down the Company. Our two proposals will establish a governance structure that will protect the interests of ALL shareholders and facilitate the value creation you should expect. Because the Herricks have proven unwilling to settle for anything short of control, unless both of these critical proposals are implemented, we should anticipate that the current pattern of Herrick-instigated, Foundation-funded disputes will continue unabated. I trust

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	you will agree with this philosophy — and with all three leading proxy advisory firms, who have overwhelmingly supported management’s proposals — and show your support at our Annual Meeting on August 14.
Section 7.19	This concludes our prepared comments for this morning. Operator, we are now ready to take questions.

Section 8 QUESTION AND ANSWER SESSION

Section 9 BUKER — FINAL REMARKS

Section 9.1 In summary, we’ve dedicated our time, energy and resources to working toward a world-class benchmark since I became CEO, and we are all focused on leading Tecumseh into the future. Unfortunately, the continued substantial decline in volumes has masked some of that progress. As we confront continuing operational headwinds in 2009, we continue to take further steps to streamline our operations, reduce operating costs and conserve cash while continuing to make the critical investments in new product development on

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	which our future success depends. Even if sales volumes don’t rebound to historical levels, we will still find ways to scale the business and become a profitable enterprise — all with an eye toward creating shareholder value. While the current economic climate may cause us to take a little longer to arrive at our destination, I remain confident that we will achieve our primary goal of transforming Tecumseh Products Company into a world-class competitor in our core markets of compressors, condensing units and complete refrigeration systems. This includes the goal of 5% EBIT that we regularly discuss and that we use as a basis to guide our strategic decision-making. All of our goals for the business are formulated with the overriding objective of growing and creating value for all our shareholders.
Section 9.2	With that, this concludes our conference call today. Thank you for your interest in Tecumseh, and we look forward to speaking with you next quarter.
Section 9.3	Thank you and have a good day.

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Tecumseh Products Company has filed a definitive proxy statement/prospectus and other relevant documents concerning the annual meeting with the United States Securities and Exchange Commission (“SEC”) on July 10, 2009. Before soliciting proxies, the Company will provide shareholders with the definitive proxy statement/prospectus. The Company advises shareholders to read the definitive proxy statement/prospectus because it contains important information about the company and certain proposals to be presented to a vote of shareholders at its 2009 annual meeting. Shareholders may obtain free copies of the definitive proxy statement/prospectus and other documents the Company files with the SEC at the SEC’s website at www.sec.gov. They may also access a copy of the Company’s definitive proxy statement/prospectus by accessing www.tecumseh.com. In addition, shareholders may obtain a free copy of the definitive proxy statement by contacting Georgeson Inc. toll free at (866) 203-1198 (banks and brokers call (212) 440-9800).

The Company, its directors, some of its executive officers and certain other of its employees are participants in the solicitation of proxies in respect of the matters to be considered at the annual meeting. Information about the participants is set forth in the definitive proxy statement/prospectus. Information about the participants’ direct or indirect interests in the matters to be considered at the annual meeting is also contained in the proxy statement/prospectus referred to above.

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